U.S. Dollar Gets Some Support in Forex Trading from Consumer Spending

The U.S. dollar is solid today in forex trading on the currency market as a number of factors come into play. First of all, spending in December turns out to have been not as bad as expected, providing some support for the dollar.

GFT's Kathy Lien reports on the spending in December:

Also spending in December was not nearly as bad as initially reported with the decline in retail sales revised up from 0.3 to 0.1 percent. The price action suggests that dollar bulls were particularly happy about this report because the smaller decline in December should lead to an upward revision to Q4 GDP. Overall the numbers indicate that U.S. consumers were not as frugal at the end of 2009 as initially thought and are already picking up spending in the beginning of the year.

Even so, U.S. consumer sentiment remains a problem for the economy. But that is being overshadowed right now by the fact that the euro can't seem to get a break in forex trading. The euro tanked overnight against the U.S. dollar as economic data and realities over the Greek rescue plan created uncertainty.

In the end, right now it is more a matter of gains going to the currency that is showing the least amount of weakness. And with the euro zone embroiled in all sorts of issues, it is the U.S. dollar that wins in that contest.